I’ve been hearding a lot about the upcoming Palm Pre smartphone. I’m so on the fence about getting one. I almost got an iPhone two years ago as well (stood in line on the first day but chickened out). I *hate* dealing with cell phone companies – making switches, signing ridiculously one-sided contracts to get locked in to a one-sided relationship for the ‘privilege’ of getting a ‘discount’ on a phone. NEWSFLASH – I’m going to have to use *one* of you stupid major carriers regardless of which phone I pick. Have *decent* service, and I won’t leave. Keep your phone prices under $200 retail, let me choose my carrier, and if you suck, I’ll switch. Chances are, for every person who switches away, you’ll get someone who switches *to* the same carrier anyway. This is the game they play now with inducements to try to get people to switch already – extra discounts, group plans, etc.
I digress…, but really I hate dealing with new phone stuff. I hate the feeling, and (for better or worse) that’s kept me out of the new ‘smartphone’ market for some time. As a developer, I’d like to be able to have multiples – I want an iPhone, and G1/G2 Android, a Blackberry, some mobile Windows and now a Palm Pre. If each one was under $200, I’d be very likely to buy them all. I wouldn’t necessarily have phone service on each one all the time, but I’d definitely have more than a couple. As it stands, ‘retail’ – I have to spend $600+ on each one – it’s insane.
Anyway – back to the Pre. I had a Palm VII years ago, liked it, but got disenchanted with all the work you needed to do to write apps for it then try to distribute them. Palm had an ‘app store’ of sorts back then, but the hoops to jump through were (IIRC) quite a lot. I’ve heard mixed things from iPhone app developers about the iPhone situation as well, but there’s clearly enough support there for tens of thousands of people to have signed up in a year.
Thinking that Palm might be embracing their developer community a bit more this time around, with the launch of the Pre just days away, I went to developer.palm.com to sign up for their Pre developer program. “Apply now” was the first orange button I saw, which already had an offputting feel to it. Perhaps Apple’s is the same way, but “sign up” or something more inviting would have been better. “Apply” already intones that I have to pass some sort of approval process, and I was right.
I had to fill out a basic contact form (no big deal) but then they asked a bunch of questions about “what type of app are you going to develop?” To be fair, these were not required questions, and perhaps this is the best time(?) to get some demographic info, but really – I have no idea what I’m going to write. I don’t know what your SDK is like. I don’t even have the stupid DEVICE yet – how would I know what sorts of apps I’m interested in writing, or what’s even possible?
I also think this might not just be purely demographic information – they might be making a decision as to who gets the SDK first based on your answers. I can’t say for certain – and maybe I’ll get approved soon, but I got the following message:
“Please note: because we expect more applications than we have openings for, we can not guarantee that you will get into the program immediately. Because of this, you may not hear from us right away. We will keep your application and you will be contacted by email when your application is approved.”
*NOW* does not seem to be the time to be shy about getting Palm SDKs in to people’s hands. The launch is imminent, developer awareness is piqued (because we’ve not seen ‘in the field’ reviews yet), but they’re being way too controlling about this. Perhaps Apple worked this way too, but this doesn’t seem to be a tactic which serves Palm well.
Is this just a short way of me ranting that I didn’t get the toys I wanted immediately when I wanted them? Perhaps, but there’s likely many other developers that want this stuff too. The more hoops devs have to jump through, and the more delays you put in their way, the fewer devs you’ll have. An underdog platform doesn’t seem to be in a position to keep developers waiting, even if it’s only for a few hours/days.
You’ve got a right to be a bit gun shy about getting into smart phone development. My experience so far on the iPhone has been pretty rough. It took me quite a while to wrap my head around the whole process, despite the availability of training materials and “support” forums (mostly the just nearly blind leading the completely blind). Just saw a new course from Stanford that might be better, and some new books are on the horizon that will hopefully do a better job than the first crop.
Knowing how little tolerance you have for dev environments that do not operate as expected, and having to jump through corporate hoops, all I can say is be prepared to be patient, persistent, and “zen” about the whole thing. It is fun once you get something working and I’m sure you’ll eventually be successful if you stick to it.
Having written several dozen iPhone apps, for the App Store and for internal use, I can attest to frustrations in getting apps to market.
But, for all Apples faults, you pay your money and you get a developer number. Done.
Of course, you do have to sign contracts and supply banking info to even publish free apps in the app store… but even then, it is a meritocracy with regard to getting the OPPORTUNITY to publish. Getting apps approved is a different rant for a different day.
However, I don’t understand Palm’s stance. I mean, don’t you WANT developers creating compelling content for your platform?
My fear – and guess – is that WebOS is seriously not ready (either technically or in terms of Palm’s support infrastructure), and holding everyone at arm’s distance is nothing more than a stalling tactic.
To understand the pricing, you have to realize that the contract requirement isn’t just the companies being vindictive and anti-competitive — that prices simply reflect their actual business model. To wit, they’re not in the business of selling phones, they’re in the business of selling service, and the prices they offer on phones are simply an incentive to enter a service contract, not the other way around. They’re subsidizing the phones at that rate; when they sell you a $200 Pre, they’re losing money on that transaction. When you factor in production, distribution, and all the other costs, their cost for a iPhone and Pre and comparable smart phones is much more than $200 — and that’s just the marginal cost per unit. This:
is precisely that they’re trying to avoid. If that’s what you’d do, they don’t want you as a customer, because you’d cost them a lot of money. And if you feel developers should be given special treatment, well, I agree — that’d be ideal for all partie. Alas, it’s just not practical. Look at how many people claim to be iPhone developers just to get the OS beta — and that’s something you not only have to pay for, but the incentive isn’t nearly as high as a $400 phone discount would be. If developers got phones for $200 with no obligation, you’d suddenly see a few hundred million “smartphone developers” climb out of the woodwork — with no increase in apps.
That said, many others share your frustration and bewilderment at how Palm has botched this launch with respect to the developer community. It’s like they don’t want to encourage apps.
To wit, they’re not in the business of selling phones
Then why are they selling phones? This is where the whole thing has fallen apart. Phone manufacturers don’t have any incentive to compete on price, because few people ever pay ‘retail’ – everyone’s getting a ‘discount’, but it’s really subsidized by carriers. This is a messed up model, imo. Let phone manufacturers design phones and sell them to the public, and let carriers offer their wireless service. Let there be some standard interfaces on the wireless networks that everyone can write to, so manufacturers can make sure their stuff works on all networks. From what I understand, most do, but they then add in this ‘lock down’ mode so that certain phones can only run on certain networks. You can ‘unlock it’ and your phone will work more or less fine on any network.
It seems to me the carriers started this by offering ‘discounts’ on retail pricing for cell phones in exchange for the lock in. If it wasn’t profitable for them, they wouldn’t do it. They shouldn’t have to ‘lose money’ if I want to have 5 phones, but in the current model, they would/might, as you suggest. So… get out of the business of selling phones. Have Motorola and Kyocera and Apple and others all make devices and compete head to head in the marketplace. I’m pretty certain that we’d see cheaper smart phones. There’d be a wider marketplace – more people might try a new phone if they weren’t locked in to long contracts. More people buying phones – more often, and based on more/newer features – should drive the prices down.
Also, how can you be sure they’re *losing* money?
Generally, when I buy something at ‘retail’ price, the store I’m buying it from has a markup. For ‘retail’ it’s often 100%. On a phone that ‘retails’ for $500, what is the dealer cost? Not everything’s a 100% markup – cars, aren’t, for example. But what’s the dealer cost of a $500 phone? $300? $400? $200?
If the dealer – in this case a carrier – is really paying $500 to the manufacturer, but really only charging you $200, and eating a $300 up front loss, you might be correct. Given the economies of scale and tight control of the market by a few players, I sincerely doubt that’s happening.
Even so, I might still pay $300 up front in order to get someone to commit to giving me $1200 over the next two years. That’s a pretty awesome rate of return on that initial investment, no? I suspect that $300 spread is totally made up in my head, and is more like $100 diff between the cost they charge the end user and what they might have as ‘cost’ paid to manufacturers. And there’s a $200 ‘early termination fee’ on top of that. Would I buy a customer at $100 that had a *minimum* return of $200, and a likelihood of $1200 over 2 years? Hell yeah.
I certainly won’t argue with that — I agree 100%. You’re still not going to get a $200 smartphone, because more direct price competition only gets you so far (they’re already competing heavily on price, but the subsidized-phone system does make that competition less efficient). But I agree that the model for cellphone sales in this country is very broken, if only because it’s screwing with consumer choice. I’m actually less concerned that it’s preventing smartphones from competing head-to-head on price and features, and more concerned that it’s preventing the service providers from competing head-to-head on service quality. If they couldn’t fall back on the lock-in they lured most of their customers into, they might actually have to step up their game.
The reason that hasn’t happened is because consumers in the US love getting stuff that *seems* cheap. Many of these phones you *can* buy for retail prices, without lock-in — but look how many people do it (granted, you have to work harder, those options aren’t pushed in your face).
And remember, much of the world *does* use the model we’d both like. So even if cellphone manufacturers and service providers were colluding in the US, there’s competition internationally that’s driving down manufacturing prices too.
There’s a widely quoted estimate that at launch, the 8GB iPhone 3G cost $173 to manufacture (which Apple pushed down from $227 for the first gen); that doesn’t include roughly $50 in royalties paid by Apple. Let’s disregard profit for the manufacturer (estimates are that Apple makes around 50% gross profit margin on the iPhone currently). You have marketing (say 8%) and traditionally distributor (18%) and retail (33%) markups — though if they sold direct, they could reduce that *somewhat* (they still incur the same costs as distributors and retailers, though, so they couldn’t push it down too much), and of course that includes some profit; so let’s say 20% markup for distribution and retail, before profit. That’s already $285, pure cost. Of course, they’re not going to sell it without profit — realistically we need to double that to $570 just to hit Apple’s current margins, and that’s completely ignoring the carriers. That’s just back-of-the-envelope, but already it’s clear that these things aren’t going to be sold retail for $200 any time soon.
[Most of these numbers supplied by random Googling; the most informative single article I found was http://www.tgdaily.com/content/view/38413/118/]